Fannie Mae needs $3.7 billion infusion of federal cash

Fannie Mae needs $3.7 billion infusion of federal cash

Fannie Mae officials announced the company will seek $3.7 billion from taxpayers after reporting a $6.5 billion net loss in its most recent quarter.

The $3.7 billion Fannie Mae's regulator - the Federal Housing Finance Agency - is asking the Treasury Department for would be the first cash grant given to Fannie Mae in six years.

Since being taken over by the government, Fannie Mae has sent $166.4 billion to the Treasury.

Mayopoulos said in a statement that the company's underlying business was strong. Freddie Mac paid $11 billion to the exchequer in 2017.


In letters to Fannie and Freddie Mac this month, Watt wrote he didn't consider the tax-cut losses "to relate to any financial instability" in the companies "either now or in the future". "As it turned out, [that money] was not enough to cover the losses it suffered in the fourth quarter thanks to the Republican tax plan", HousingWire said.

The two so-called government-sponsored enterprises, which securitize and guarantee mortgages originated by other lenders, have been under conservatorship since September 2008, when the US government engineered a bailout at the height of the financial crisis. In its annual report, Fannie said Watt would continue them "in light of FHFA's determination that this draw is triggered by a one-time charge". The company said it expects the FHFA to request $312 million from the Treasury. "Other factors that may result in volatility in the company's quarterly financial results include developments that affect its loss reserves, such as changes in interest rates, home prices or accounting standards, or events such as natural disasters".

"The challenge is that additional draws of taxpayer support would reduce the amount of taxpayer backing available to the enterprises under the PSPAs and the foreseeable risk that the uncertainty associated with such draws or from the reduction in committed taxpayer backing could adversely impact the housing finance market", Watt said.

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